I know that Shemaroo is growing at a great pace. That much cannot be in doubt. But growth has been the undoing of many a good business. Growth if not supported by adequate returns on capital destroys a lot of wealth. Its like an alcoholic who originally started as a occasional social drinker and over time destroyed his liver and had to go into rehab. Have a look - Shemaroo has a poor median ROA ( net of cash and investments - doesnt have too many to begin with) of 8.20% but it is certainly growing its sales and profits at 18.83% & 30.78%, a fast clip. Thats a lot of growing without any major increase in ROA. Be careful fellas of this somras called growth.

In order to understand Shemaroo usage Content, I tried to check vieweship detail of Major channel of Shemaroo from youtube as on Jan 4, 2017. Column B to Column E in following table are compiled from Youtube. Column F to M are compiled from http://vidstatsx.com/. Column N is conversion of time in minutes. Around 28 of 77 Channel of Shemaroo accounts for 95% of Viewership of Shemaroo on Youtube.

For the Top 10 Channels, I again use http://vidstatsx.com/ data for Top 49 videos of Each channel. Average Time spent on top 490 video (Top 10 channel mutliplied by 49 video for each channel,aggregate accounting for nearly 40% of Total viewership on Shemaroo) is aroud 50 minutes. This shall be viewed in context of average time spent of 10 minutes on Ultra hindi, 5 Minutes for T Series, 4 minutes of Eros Now and ~ 4 minutes for YRF.

So, average Shemaroo viewer (based on 40% of Viewership sample) spent ~ 50 minutes on video of Shemaroo as compared with 5-10 minutes for peer. I need assistance to undestand how would this result in adverstisement revenue for Shemaroo. Also looking forward for viewpoint of any other member who can further analyse the data and assist in better understanding of Shemaroo advertisement revenue.

Touchstorm is categorizing the entire YouTube platform, profiling millions of YouTube channels and has created the Touchstorm Video Index Score — TVi for short.A TVi score is the single measure of the overall health of a YouTube channel on a scale of one to a thousand. It rolls up a myriad of qualitative data points. You can think of it like a FICO score, only for YouTube.The TVi Score balances the “metrics that matter” to produce one number that represents the healthiest and best performing YouTube channels. To recap, these key metrics are Views, View Density, Subscribers, Subscriber Conversion, Likeability and Best Channel Practices.

Below is the TVi score on the scale of 1 - 1000 for some of the top Shemaroo channels on youtube

Excellent compilation of data. Thanks for digging out. I was struggling to make out the stickiness of the content across various channels and how shemaroo ranks there. Though I have yet to get full idea about the methodology used to calculate it, based on the data and my limited understanding following fall outs/observations

From interaction with industry folks and Shemaroo management, I understand that more time the viewers spend on the channel--higher is the attractiveness for the advertisers and hence potentially higher CPM. Considering the fact that Shemaroo's group channels have avg time spent on view is much higher- they should command higher volume/rate from advertisers.

However, contrary to this expectation, when I watch similar length Video across various channels (i.e film songs on Filmi Ganne Vs. film song on Ultra or a movie on Shemaroo vs a movie on Ultra), the fill rate for advertisement is much higher on Ultra than Shemaroo. This to me seems perplexing but may be there are multiple factors that may decide the attractiveness of a channel/video for advertisers which I am not able to grasp.

So not so sure, how do we evaluate the impact of this data point for Shemaroo's business.

Isnt it the other way around..,Netflix and Amazon cannot have a compelling library without paying royalties for some of the content which resides with shemaroo(both temporary and permanent rights).Shemaroo comes higher up in the supply chain, they are not consumer facing for the most part(apart from youtube) They give their content to be used in dish tv and tata sky(miniplex) telecom operators and to online players like hotstar, amazon and netflix.But going forward maybe the entry of Amazon and to a lesser extent Netflix may drive up the digital rights prices of content making it difficult for shemaroo to maintain the margins they do have now.

The new shareholding pattern is out. Mr. Madhav Bhatkuly from New Horizon Opportunities Master Fund, has acquired close to 10% of the company for 100+ Cr this quarter. It looks like most of it was bought from Copthall Mauritius Investment Limited, which held close to 9% stake, the earlier quarter.

2 interesting articles on how Nostalgia (mentioned by @bheeshma few posts back) being used by various brands

Those good old days and the power of nostalgia

It is undeniable that 2016 celebrated nostalgia in all its fervour and for good reason. We may not yet have the ability to physically travel through time, but mental time travel to the good old days is a rather cheap and effective way to feel better when we are unsure, uncertain, and uncomfortable. Last year certainly was not short of opportunities to make one feel that way.

Memories are triggered by sights, sounds and images (and in some cases touch and smell). They invoke both anticipation and remembrance. Advertising combines all of these facets in a time capsule called nostalgia which creative experts describe as both “comfort food” and “emotional blackmail” to communicate a brand’s directive.

The NOPAT margins have certainly increased over time from 9% in '11 to 14% in '16 but capital turnover has decreased over the same period from 0.74 to 0.62 (Maybe it has something to do with the way i calculate capital invested , total assets - cash & investments). Doesn't this mean that every addn rupee of capital invested in the company is generating a revenue of just 62 paise ( as of now )?

I am aware that these are historic numbers and the growth rates in new media is what is going to contribute to the future ( hopefully ) expansion in margins. The thing is expanding margins bring in new players with bigger and better resources. There are just too many moving parts here!

idea and vodafone in talks to merge and create indias biggest teleco. also jio has propelled all players to give freebies for long term eg airtel now offering 1 year 4g at throwaway prices. these move will further make the market competitive with the end gainer being the customer in terms of better services , quality and price offerings. Also all the commercials on tv these days are mostly of smartphones or 4g services. there is a dynamic change happening around us and in a very fast way. and while coming to stock markets i only find shemaroo among the few quality names which can be be a good proxy to gain from this change. either that will show in growth or a possible takeover. either ways might be rewarding

Yes , shemaroo has invested heavily in gaining inventory in anticipation of the digital move , but i think it is happening faster than even they anticipated due to jio induced price war which is taking place now. I think they understand the landscape well and when the inflection point occurs when a significant chunk of the income start flowing digital sources the content should start paying for itself and should set up a cascade effect of further content aquisition and so on. I think their moat so to speak is 1.Content bank(which they can loan out to the netflixs and hotstars of the world)2.Youtube channel(great subscriber count and hence a ready made audience)3.their domain knowledge which allows them to find sources to milk their assets such as: 3.1 dish,tata sky and other packaged offerings 3.2 splicing content from movies into clips and other compilations to drive viewership

Possible avenues of revenue in the future:Their film themed merchandise called yedaz which they are experimenting with now looks very interesting.Film Merchandise is a huge industry overseas and my sense is that india should soon jump on that bandwagon. Their huge range of content rights the hold should hold them in good stead here.

cons:the accounting of inventory is not very simple and free cash flows are a problem right now.